Q3 2023 DocGo Inc Earnings Call

Okay.

Greetings and welcome to the Doc go fourth quarter 2023 earnings conference call.

Speaker 1: Greetings and welcome to the doc go third quarter 2023 earnings conference call at this time all participants

At this time, all participants are in listen only mode.

Speaker 1: A brief question and answer session will follow the formal presentation.

Brief question and answer session will follow the formal presentation.

Speaker 1: If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is...

If anyone should require operator assistance during the conference. Please press Star and then zero new telephone keypad.

As a reminder, this conference is being recorded.

Speaker 1: Please now my pleasure to introduce your host, Mike Cole, direct of investor relations, and he said, please go ahead.

It is now my pleasure to introduce your host Mike Cole director of Investor Relations. Thank you. Sir Please go ahead.

Speaker 2: Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward looking statements. All statements made in this conference call other than statements of historical fact are forward looking statements. The words may, will, plan, potential, could, goal, outlook, design, anticipate, aim, believe, estimate, expect, intend, guidance, confidence, target, project and other similar expressions may be used to identify such forward looking statements.

Thank you operator before turning the call over to management I would like to make the following remarks concerning forward looking statements. All statements made in this conference call other than statements of historical fact are forward looking statements. The words may will plan potential good goal outlook design anticipate angel.

Aleve estimate expect intend guidance confidence target project and other similar expressions may be used to identify such forward looking statements. These forward looking statements are not guarantees of future performance and we cannot assure you that we will achieve or realize our plans intentions outcomes results or expectations.

Speaker 2: These forward-looking statements are not guarantees of future performance and we cannot assure you that we will achieve or realize our plans, intentions, outcomes, results, or expectations. Forward-looking statements are inherently subject to substantial risks, uncertainties, and assumptions, many of which are beyond our control and may cause our actual results or outcomes or the timing of the results or outcomes to differ materially from those contained in our forward-looking statement.

Statements are inherently subject to substantial risks uncertainties and assumptions many of which are beyond our control and may cause our actual results or outcomes or the timing of the results or outcomes to differ materially from those contained in our forward looking statement.

Speaker 2: These risks, uncertainties, and assumptions include, but are not limited to, those discussed in our risk factors and elsewhere in DACA's annual report on Form 10-K , quarterly reports on Form 10-Q , and other reports and statements filed by DACA with the FCC to which your attention is directed. Actual outcomes and results, or the timing of results or outcomes, may differ materially from what is expressed or implied by these forward-looking statements.

These risks uncertainties and assumptions include but are not limited to those discussed in our in our risk factors and elsewhere in <unk> annual report on Form 10-K quarterly reports on Form 10-Q, and other reports and statements filed by <unk> with the SEC. What's your attention is directed actual outcomes and results or the timing of results or outcome.

<unk> may differ materially from what is expressed or implied by these forward looking statements.

Speaker 2: In addition, today's call contains references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided directly as part of this call or included in our earnings release, which is posted on our website, dot go dot com, as well as filed with the Securities and Exchange Commission.

In addition, today's call contains references to non-GAAP financial measures reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided directly as part of this call are included in our earnings release, which is posted on our website <unk> dot com as well as filed with the Securities and Exchange Commission.

Speaker 2: The information contained in this call is accurate as of only the date discussed. Investors should not assume the statements will remain relevant and operative at a later time. We undertake no obligation to update any information discussed in this call to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events except as to the extent required by law.

The information contained in this call is accurate as of the date discussed investors should not assume that statements will remain relevant and operative at a later time.

We undertake no obligation to update any information discussed in this call to reflect events or circumstances. After the date of this call or to reflect new information or the occurrence of unanticipated events except.

As to the extent required by law.

Speaker 3: At this time, it is now my pleasure to turn the call over to Mr. Lee Bienstock, CEO of Dachgo. Lee, please go ahead. Thank you, Mike.

At this time it is now my pleasure to turn the call over to Mr. Lee being stock CEO. Dr. Li. Please go ahead.

Thank you Mike and thank you all for joining us today.

Speaker 4: The third quarter marked our strongest growth since conception, and I am extremely proud of the focus our team has brought to expanding our suite of services, our operational execution, and our financial performance.

The third quarter marked our strongest growth since inception, and I'm extremely proud of the focus our team has brought to expanding our suite of services, our operational execution and our financial performance for.

Speaker 4: Both during the quarter and subsequent to quarter end, we continue to expand with our current customers while also signing new customers and winning RFPs.

During the quarter and subsequent to quarter end, we continued to expand with our current customers, while also signing new customers and winning Rfps most.

Speaker 4: Most importantly, our team continues to strive to increase access to care for those who need it.

Most importantly, our team continues to strive to increase access to care for those who need it most.

Speaker 4: During the third quarter, we surpassed 7.5 million total patient interactions since inception, while leveraging a workforce that has now grown to over 6,000. More than double since I joined the company.

During the third quarter, we surpassed $7 5 million total patient interactions since inception, while leveraging the workforce that has now grown to over 6000 more.

More than double since I joined the company.

Speaker 4: Our services are in strong demand across the board, and as a result, we are increasing our full year 2023 revenue guidance to $615 to $625 million, up from $540 to $550 million. And we are increasing our full year 2023 adjusted EBITDA guidance to $50 to $55 million, up from $48 to $53 million.

Our services are in strong demand across the board and as a result, we are increasing our full year 2023 revenue guidance to $615 million to $625 million up from $540 million to $550 million and we are increasing our full year 2023, adjusted EBITDA guidance to 50.

To $55 million up from $48 million to $53 million.

While our migrant work has received much of the media attention in Q3.

Speaker 4: While our migrant work has received much of the media attention in Q3, it barely scratches the surface of what.gov accomplished last quarter.

Air lease scratches the surface of what <unk> accomplished last quarter.

Speaker 4: To give a sense of the full picture in Q3 alone, Daco transported over 158,000 patients. Our patient engagement team conducted outreach to over 50,000 patients. We provided RPM, VGM, and CIED monitoring for over 46,000 patients, and increased our staffing head count by over 26% during the quarter due to increased demand for our service.

Give a sense of the full picture in Q3 alone Zakho transported over 158000 patients or patient engagement team conducted outreach to over 50000 patients we provided RPM bcm and see Ied monitoring for over 46000 patients and increased our staffing head count by over <unk>.

26% during the quarter due to increased demand for our services.

Speaker 4: We also increased our clinical capabilities to close over 30 different care gaps in patients' homes, including bone density measurements, colon cancer screenings, diabetic retinal screenings, and annual wellness.

We also increased our clinical capabilities to close over 30 different care gaps and patients' homes, including bone density measurements colon cancer screening diabetic retinal screenings and annual wellness visits.

Speaker 4: .go is bringing care to patients where and when they need it. We are gratified to see that many of our customers recognize the value of our services and routinely expand our sites.

Darko is bringing care to patients where and when they need it and we are gratified to see that many of our customers recognize the value of our services and routinely expand our assignments.

Speaker 4: I'm excited by all our efforts to serve patients with our insurance partners, government and municipal population health programs, and hospital system customers.

I am excited by all of our efforts to serve patients with our insurance partners government and municipal population health programs.

And hospital system customers.

Speaker 4: I'd like to share our impact, progress, and future opportunities across all three of these key areas.

I'd like to share our impact progress and future opportunities across all three of these key areas.

Speaker 4: First, with our insurance partners and ad risk provider groups, the market opportunity with major insurance companies and value-based care partners, like the deals we've signed with healthcare partners, emblem health, and others, is one area where we have made a difference.

First.

With our insurance partners and address provider groups the market opportunity with major insurance companies and value based care partners like the deals we've signed with healthcare partners emblem health and others.

There's one area, where we have made great progress.

Speaker 4: We entered this space with pilot programs late last year, and the majority of those partnerships we've launched have expanded over the past six months.

We entered this space with pilot programs late last year and the majority of those partnerships. We've launched have expanded over the past six months.

Speaker 4: driving more expansive commercial rollouts. Last quarter, we announced that we expected to be assigned 73,000 patients to close care gaps and provide primary care services under these agreements with four payers.

Driving more expansive commercial rollouts last quarter, we announced that we expect it to be assigned 73000 patients to close care gaps and provide primary care services under these agreements with for payers.

Speaker 4: We have already been assigned 59,000 of these patients and have expanded our clinical offerings to encompass a wide range of primary care services, including annual wellness visits for Medicare members and pediatric checkups, including childhood vaccinations and nutritional counseling for Medicaid members. We expect strong growth in the number of

We have already been assigned 59000 of these patients and have expanded our clinical offerings to encompass a wide range of primary care services, including annual wellness visits for Medicare members, and pediatric checkups, including childhood vaccinations and nutritional counseling for Medicaid members.

We expect strong growth in the number of patients with schein.

Speaker 4: And view this as a significant opportunity for.co with years of growth potential ahead.

And view this as a significant opportunity for Darko with years of growth potential ahead.

Speaker 4: In our population health programs, our work with migrant-related services has continued to grow substantially during the quarter and we've launched four new sites in the last six weeks alone. We expect to continue to work closely with our partners at the city to provide a silence seekers with the medical care, behavioral health care, basic necessities and support services to help transition them out of the program into a position of self-sustainability as quickly as possible.

And our population health programs, our work with migrant related services has continued to grow substantially during the quarter and we've launched four new sites in the last six weeks alone.

We expect to continue to work closely with our partners at the city to provide asylum seekers with the medical care behavioral health care basic necessities and support services help transition them out of the programs and into a position of self sustainability as quickly as possible.

Speaker 4: Contrary to early negative media, we recently shared that the contract has been registered and payments have commenced.

Contrary to early negative media, we recently shared at the contract has been registered and payments have commenced.

Speaker 4: In addition, a recent independent report by the New York State Office of Temporary and Disability Assistance found that our programs were working as planned and asylee needs are being met. We believe this report accurately reflects DACAO's efforts and program quality, as well as our commitment, diligence, and dedication to helping to improve the health, safety, and overall well-being of all those in our care.

In addition, a recent independent report.

New York State office of temporary and disability assistance found that our programs, we're working as planned and a filing needs are being met we.

We believe this report accurately reflects stockholders' efforts and program quality as well as our commitment diligence and dedication to helping to improve the health safety and overall well being of all of those in our care.

Speaker 4: Submissions from municipal and corporate RFPs remain a core focus and a material opportunity for the company.

Submissions from municipal and corporate Rfps remains a core focus and a material opportunity for the company.

Speaker 4: We recently learned that we were not awarded a large federal border patrol RFP.

We recently learned that we were not awarded a large federal a border patrol RFP, but we have many other opportunities we are excited about.

Speaker 4: but we have many other opportunities we are excited about. Going forward, we intend to speak about this channel as a portfolio of opportunities without as much granular detail on any one specific art.

Going forward, we intend to speak about this channel as a portfolio of opportunities without as much granular detail on any one specific RFP.

Speaker 4: We intend to pursue mobile health, both medical and behavioral health, medical transportation, and municipal opportunities, both within our current footprint and with an eye towards expanding into new states, all aligned with our growing skills.

We intend to pursue mobile health, both medical and behavioral health medical transportation and municipal opportunities both within our current footprint and with an eye towards expanding into new states all aligned with our growing scale.

Speaker 4: For our partners with hospital systems and medical transportation, we are also seeing substantial new contract wins.

For our partners with hospital systems and medical Transportation. We are also seeing substantial new contract wins.

Speaker 4: To share a few, we recently announced our contract with Mainline Health Systems in the Northeast which we expect to represent approximately $23.5 million in revenue potential over three years.

To share a few we recently announced our contract with mainline health systems in the northeast, which we expect to represent approximately $23 $5 million in revenue potential over three years.

Speaker 4: and we have plans to further grow this relationship in early 2024.

And we have plans to further grow this relationship in early 2024.

Speaker 4: Additionally, we want a large medical transportation contract value that $34 million over the next five years in the UK And our large New York health and hospitals contract we announced early this year is now fully rolled out as planned

Additionally, we won a large medical transportation contract valued at $34 million over the next five years in the U K.

And our large New York Health and hospitals contract, we announced early this year is now fully rolled out as planned.

Speaker 4: We are very pleased with how this segment is performing and expect to see continued strong organic growth in the coming quarter.

We are very pleased with how this segment is performing and expect to see continued strong organic growth in the coming quarters.

Speaker 4: At this time, I'll hand it over to Norm to cover the financials. Norm, please go ahead.

At this time I'll hand, it over to norm to cover the financials norm. Please go ahead.

Thank you Lee and good afternoon total revenue for the first for the third quarter of 2023 amounted to a company record of $186 $6 million, which was 49% higher than our last record set just a quarter ago in Q2, and it represented a 79% increase from the third quarter of 2022.

Speaker 5: Total revenue for the third quarter of 2023 amounted to a company record of $186.6 million, which was 49% higher than our last record set just a quarter ago in Q2, and it represented a 79% increase from the third quarter of 2022.

Speaker 5: Mobile Health Revenue for the third quarter of 2023 was $139.3 million, up to 74% in the second quarter, and 82% higher than last year's third quarter. While most of the revenue gains who are related to the extension of our migrant services contract, we experience growth across several projects.

Mobile health revenue for the third quarter of 2023 was $139 3 million up 74% from the second quarter and 82% higher than last year's third quarter. While most of the revenue gains were related to the expansion of our migrant services contracts, we experienced growth across several projects.

Speaker 5: Some of our migrant services programs include the provision of what we call total care services, which include shelter and related items in addition to core medical services. These non-medical services are expected to account for a smaller proportion of DACA's overall revenue-based and future quarters as are newly awarded or launched contracts tend to be more focused on medical-related services.

Some of our migrant services programs include the provision of what we call total care services, which include shelter and related items. In addition to core medical services. These non medical services are expected to account for a smaller proportion of <unk> overall revenue base in future quarters as our newly awarded were launched contracts tend to be more focused on medic.

<unk> related services.

Speaker 5: Transportation services revenue increased to $47.2 million in Q3 of 2023, a 4% from the second quarter of this year, and more than 70% higher than transportation revenues in the third quarter of 2022.

The expectation services revenue increased to $47 2 million in Q3 of 2023 up 4% from the second quarter of this year and more than 70% higher than transportation revenues in the third quarter of 2020 to nearly every core transportation market with this year over year revenue growth continuing the momentum that began.

Speaker 5: Nearly every core transportation market would this year over your revenue growth, continuing the moment of depth again in the second half of last year.

In the second half of last year.

Speaker 5: In the third quarter, mobile health revenues accounted for approximately 75% of total revenues, and transportation was approximately 25%.

In the third quarter mobile health revenues accounted for approximately 75% of total revenues and transportation was approximately 25%.

Speaker 5: This breakdown is closer to our expected mix of revenues than what we have seen in the prior three quarters.

This breakdown is closer to our expected mix of revenues and what we have seen in the prior three quarters based upon early indications in Q4. It appears that mobile health will likely continue to account for over 75% of total revenues in the fourth quarter of this year.

Speaker 5: Based upon early indications in Q4, it appears that mobile health will likely continue to account for over 75% of total revenues in the Ford quarter of this year.

Speaker 5: As to the end of the third quarter, our revenue backlog defined as remaining revenue from projects that have been awarded, but have not yet been fully rolled out. So that $430 million up from $325 million at the end of Q2.

So the end of the third quarter, our revenue backlog defined as remaining revenue from projects that have been awarded but have not yet been fully rolled out stood at $430 million up from $325 million at the end of Q2.

Speaker 5: We recorded net income of approximately $4.6 million in Q3 of 2023, compared with net income of $1.3 million in the second quarter and net income of $2.5 million in the third quarter of 2022.

We recorded net income of approximately $4 6 million in Q3 of 2023 compared with net income of $1 $3 million in the second quarter and net income of $2 $5 million in the third quarter of 2022.

Speaker 5: adjusted EBITDA up to the third quarter of 2023, amounted to $16.7 million, up 84% from adjusted EBITDA of 9.1 million in the second quarter, and nearly doubled the $8.4 million in last year's third quarter. The adjusted EBITDA margin in Q3 was 9%, compared to 7.3% in the second quarter, and 8.1% in the third quarter of 2022.

Adjusted EBITDA for the third quarter of 2023 amounted to $16 $7 million up 84% from adjusted EBITDA of $9 1 million in the second quarter and nearly double the $8 $4 million in last year's third quarter. The adjusted EBITDA margin in Q3 was 9% compared to seven 3%.

In the second quarter and eight 1% in the third quarter of 2022.

Speaker 5: Total gross margin percentage during the third quarter of 2023 was 29.5%. Down from 33.4% in the second quarter at 31.7% in the third quarter of 2022. Gross margins in the third quarter were negatively impacted by the increase in revenues and the associated project ramp up costs that resulted from the recent launch and ramp up of new projects.

Total gross margin percentage during the third quarter of 2023 was 29, 5% down from 33, 4% in the second quarter at 31, 7% in the third quarter of 2022.

Gross margins in the third quarter were negatively impacted by the increase in revenues and the associated project ramp up costs that resulted from the recent launch and ramp up of new projects. As previously discussed our revenue increased approximately $60 million just since the end of the second quarter. We took the opportunities that were presented to accelerate our growth with the <unk>.

Speaker 5: As previously discussed, our revenue increased approximately $60 million just since the end of the second quarter. We took the opportunities that were presented to accelerate our growth with the anticipated tradeoff of temporarily low gross margin.

<unk> trade off of temporarily lower gross margins, while we had previously anticipated that gross margins would continue to improve sequentially. Throughout 2023, we had indicated that overall margins could be impacted by the timing and size of newly launched and ramp up projects. This is exactly what occurred in the third quarter of 2023.

Speaker 5: While we had previously anticipated that gross margins would continue to improve sequentially throughout 2023, we had indicated that overall margins could be impacted by the timing and size of newly launched and ramped up projects. This is exactly what occurred in the third quarter of 2023. However, it is worth noting that gross margins were still more than 100 basis points higher than the recent low point of the first quarter of this year.

However, it is worth noting that gross margins were still more than a 100 basis points higher than the recent low point of the first quarter of this year.

Speaker 5: Specifically, when we witness accelerator-rated revenue growth, we tend to see higher than normal labor costs due to higher than planned overtime rates and a greater dependence on relatively more expensive subcontracted labor.

Specifically, when we witness accelerated revenue growth, we tend to see higher than normal labor cost due to higher than planned overtime rates and a greater dependence on relatively more expensive subcontracted labor.

Speaker 5: During Q3, our company-wide overtime rate was 17%, well above our targeted rate of 5% to 10%. Some contracted employees accounted for close to 50% of total field labor costs. We typically aim for this number to be closer to the 25% area.

During Q3, our companywide overtime rate was 17% well above our targeted rate of 5% to 10%.

Contracted employees accounted for close to 50% of total field labor costs. We typically aim for this number to be closer to the 25% area.

During the third quarter gross margins from the mobile health segment were 28, 8% compared to 34, 9% in the second quarter and 34, 8% in the third quarter of 2022 in the transportation segment gross margins expanded for the fifth consecutive quarter, increasing to 31, 7% from Q3 of 2020.

Speaker 5: During the third quarter, gross margins from the mobile health segment, or 28.8%, compared to 34.9% of the second quarter, and 34.8% in the third quarter of 2022. In a transportation segment, gross margins expanded for the fifth consecutive quarter, increasing to 31.7% in Q3 of 2023, up from 30.7% in the second quarter, and 23.2% in Q3 of 2022.

<unk> up from 37% in the second quarter and 23, 2% in Q3 of 2022.

Looking at operating costs operating expenses as a percentage of total revenues amounted to 24, 8% in the third quarter of 2023 down significantly from 32, 1% in the second quarter and compared to 27, 7% in the third quarter of 2022 looking at the same comparison without depreciation.

Speaker 5: Looking at operating costs, operating expenses as a percentage of total revenues amounted to 24.8% in third quarter of 2023, down significantly from 32.1% in the second quarter, and compared to 27.7% in the third quarter of 2022.

Speaker 5: Looking at the same comparison without depreciation and stock comp expenses, operating expenses as a percentage of total revenues amounted to 20.7% in the third quarter of 2023, down from 26.4% in the second quarter and 23.7% in the third quarter of 2022. As revenues.

And stock comp expenses operating expenses as a percentage of total revenues amounted to 27% in the third quarter of 2023 down from 26, 4% in the second quarter and 23, 7% in the third quarter of 2022 as.

As revenues have increased.

Speaker 5: We have seen operating expenses decline as a percentage of total revenues leading to operating margin expansion. Therefore, despite the lower gross margins adjusted even though margins were higher in Q3 than in either Q2 or a Q3 of last year, as I mentioned earlier.

We have seen operating expenses declined as a percentage of total revenues leading to operating margin expansion. Therefore, despite lower gross margins adjusted EBITDA margins were higher in Q3 than in either Q2 or Q3 of last year as I mentioned earlier.

Speaker 5: Now, turn to the balance sheet. As of September 30, 2023, our total cash and cash equivalents, including restricted cash, will $67.3 million.

Now turning to the balance sheet.

As of September 32023, our total cash and cash equivalents, including restricted cash was $67 3 million.

Speaker 5: as compared to 123.8 million as of the end of Q2. The decline in the cash balance is primarily related.

As compared to $123 8 million as of the end of Q2.

The decline in the cash balance is primarily related to.

Speaker 5: to increase in our accounts receivable. Reflecting the increase in revenues in Q3, which was on top of this Equipment Work and Revenue in Q2. This revenue increase was primarily driven by our government business, including our micro-related work, which features a lengthy initial payment type.

Do you have an increase in our accounts receivable, reflecting the increase in revenues in Q3, which was on top of this incredible work in revenues in Q2. This revenue increase was primarily driven by our government business, including our micro related work, which features a lengthy initial payment cycle how's.

Speaker 5: However, since the end of the third quarter, we have now begun to receive payments for this work performed. And as we reduce these accounts receivable, we expect near-term collections to be enough to drive our total cash balance higher in subsequent periods, despite our ongoing organ capital needs.

However, since the end of the third quarter, we have now begun to receive payments for this work performed and as we reduce these accounts receivable, we expect near term collections to be enough to drive our total cash balance higher than subsequent periods. Despite our ongoing working capital needs.

Speaker 5: In order to bolster our working capital, subsequent to quarter end, we drew down on a revolving credit facility in the amount of $25 million. This leaves us with another $65 million in available credit. We viewed this credit as being...

In order to bolster our working capital subsequent to quarter end, we drew down on our revolving credit facility and the amounts of $25 million. This leaves us with another $65 million in available credit we viewed this credit as being short term in nature as our largest outstanding invoices are paid back we plan to pay down the amounts outstanding however.

Speaker 5: As our largest outstanding invoices are paid back, we plan to pay down the amounts outstanding. However, we do expect the recent working capital demands to persist as we stay in growth mode with an increasing payroll and as we are paying sizable invoices to our vendors, all well in advance of receiving payments from these customers.

Do you expect the recent working capital demands to persist as we state in growth mode, with an increasing payroll and as we were paying sizable invoices to our vendors all well in advance of receiving payments from these customers.

Speaker 5: Turning to our outlook for the remainder of 2023, we anticipate continued strong demand from our customers for both mobile health and transportation services. We're very encouraged by our performance so far in Q4. As so far, early indications reflect that we have carried over the revenue momentum from Q3, wherein we've written as higher monthly revenues and expanded margins throughout each month of the third quarter.

Turning to our outlook for the remainder of 2023, we anticipate continued strong demand from our customers for both mobile health and transportation services, we're very encouraged by our performance. So far in Q4, and so far early indications reflect that we have carried over the revenue momentum from Q3, whereas we witnessed higher monthly revenues and.

Expanded margins throughout each month of the third quarter, while revenues in Q3 were much higher than initially anticipated.

Speaker 5: While revenues in Q3 were much higher than initially anticipated, we viewed this outperformance as an acceleration, not as an average.

We view this outperformance as an acceleration not as an aberration. During Q3, we got to a point on a growth curve than we had originally assumed was at least another quarter or two out but we do not believe that this is the one this is onetime revenue as such as Lee mentioned earlier, we are raising our revenue guidance for the full year 2023, and we now expect that revenue.

Speaker 5: During Q3, we got to a point on our growth curve that we had originally assumed with at least another quarter or two out. But we do not believe that this is one, and this is...

Speaker 5: As such, as Lee mentioned earlier, we are raising our revenue guidance for the full year 2023, and we now expect that revenues will be in the range of $615 million to $625 million, compared with our most recent increase in revenue guidance into the $540 million to $550 million range. The original revenue guidance for 2023, I'll remind everyone, was $500 million to $510 million.

These will be in the range of $615 million to $625 million.

Compared with our most recent increase in revenue guidance into the 540 million to $550 million range. The original revenue guidance for 2023, I'll remind everyone was 500 million to $510 million.

Speaker 5: The increased revenue guidance range would represent year-over-year top-line growth of about 40% on an as-report basis. However, when removing the $75 million of mass COVID testing from our 2022 revenue baseline and considering that we have not received any material, mass COVID testing revenues thus far in 2023, then we would expect to be looking at top-line growth of nearly 70% when comparing full year 2023 with full year 2022.

The increased revenue guidance range would represent year over year topline growth of about 40% on an as reported basis. However, when removing the $75 million of mass Covid testing from our 2022 revenue baseline and considering that we have not received any material matched COVID-19 testing revenues. Thus far in 2023, then we would expect to be looking at.

Offline growth of nearly 70% when comparing full year 2023 with full year 2022.

Speaker 5: We are also increasing our guidance for adjusted EBITDA into the range of 50 million to 55 million up from our recent guidance of 48 million to 53 million, which I already been raised last quarter from our initial 2023 guidance range of 45 million dollars to 50 million.

We are also increasing our guidance for adjusted EBITDA into the range of 50 million to $55 million up from our recent guidance of 48 million to $53 million, which had already been raised last quarter from our initial 2023 guidance range of $45 million to $50 million.

Speaker 5: With respect to 2024, it's too early for me to provide any specific details at this time. However, we expect a strong finish to 2023, which is implied by our guidance, and we believe that our backlog numbers gives us solid visibility and to continue growth in 2024. At this point, I'd like to turn the call back over to Lee.

With respect to 2024, it's too early for me to provide any specific details at this time.

We expect a strong finish to 2023, which is implied by our guidance and we believe that our backlog numbers gives us solid visibility into continued growth in 2024 at.

At this point I'd like to turn the call back over to Lee.

Thank you norm.

Speaker 4: My goal as CEO is to usher in a new era of operational excellence, maturity and vision as Daco becomes laser focused on what I consider to be our three greatest growth opportunities.

My goal as CEO is to Usher in a new era of operational excellence maturity envision as <unk> becomes laser focused on what I consider to be a three greatest growth opportunities.

Speaker 4: My vision for the future of our company is clear. We help our three customer verticals, health systems, municipalities, and insurers keep patients out of the hospital.

My vision for the future of our company is clear.

We help our three customer verticals health systems municipalities and insurers.

Keep patients out of the hospital.

Speaker 4: First, as I mentioned at the top, CareGap Collager and additional opportunities with major insurance companies and value-based care provided.

First as I mentioned at the top tier gap closure and additional opportunities with major insurance companies and value based care provider groups. The early data points are exciting.

Speaker 4: The early data points are exciting. And we are working on numerous opportunities that we expect to expand our number of assigned patients, our geographical presence, and scope of service.

And we are working on numerous opportunities that we expect to expand our number of assigned patients our geographical presence and scope of services.

Speaker 4: A remote patient monitoring and chronic care management solutions fall under this effort as well. We believe our in-home and virtual medical visits combined with remote monitoring and care management allows us to successfully care for some of the most complex patients with drive the highest cost.

Our remote patient monitoring and chronic care management solutions fall under this effort as well.

We believe our in home and virtual medical visits combined with remote monitoring and care management allows us to successfully care for some of the most complex patients which drives the highest costs lean.

Speaker 4: We intend to bring this capability to our health plan partners with innovative programs where we can potentially share in the savings we deliver.

We intend to bring this capability to our health plan partners with innovative programs, where we can potentially share in the savings we deliver.

Speaker 4: Second, readmission avoidance programs with major hospital systems. These programs have historically yielded strong results for our customers, and we intend to aggressively pursue growth opportunities in this firm.

Second.

Readmission avoidance programs with major hospital systems. These programs has historically yielded strong results for our customers and we intend to aggressively pursue growth opportunities in this vertical.

Speaker 4: And lastly, continued emphasis on our RFP channel and what we believe to be large market opportunities. We have made great strides in the last year enhancing our overall ability to identify and compete for these types of projects. And we expect to continue winning larger and larger contracts over time.

And lastly continued emphasis on our RFP channel and what we believe to be large market opportunities. We have made great strides in the last year enhancing our overall ability to identify and compete for these for these types of projects and we expect to continue winning larger and larger contracts over.

Time.

The common thread in those three markets is that we have the customer data to support the value proposition that <unk> offers now we just have to go out and grow it and we're going to focus on doing exactly that we.

Speaker 4: The common thread in those three markets is that we have the customer data to support the value proposition that Daco off.

Speaker 4: Now we just have to go out and grow it. And we are going to focus on doing exactly

Speaker 4: We believe we have multiple greenfield opportunities in front of us within the three verticals I've mentioned throughout this call. And my goal as CEO is to lay the foundation for significant growth at DACAO for many years.

We believe we have multiple greenfield opportunities in front of us within the three verticals I've mentioned throughout this call and my goal as CEO is to lay the foundation for significant growth at <unk> for many years Tom.

At this time I'll hand, it over to the operator to open up Q&A operator. Please go ahead.

Speaker 4: At this time, I'll hand it over to the operator to open up Q&A. Operator, please go ahead.

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Thank you Sir.

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Speaker 1: The first question we have comes from Sarah James, from Council Fitzgerald. Please go ahead. That was the study.

The first question we have comes from Sarah James from Cantor Fitzgerald. Please go ahead.

Sir Please go ahead.

Speaker 6: I wanted to circle back to Norm's comments

Sorry about that.

I wanted to circle back to another comment operating expense ratio I appreciate the comments on scale, but I wanted to understand if this implies this is the new run rate or is there other moving pieces like timing of investment spend.

Speaker 7: This is the new run rate or if there are other moving pieces like timing of investment spend that benefited the quarter.

We entered the quarter.

Sure Sir.

I would say that.

Speaker 5: predominantly what you saw during the quarter reflects the new run rate meaning given that we would expect that revenues would pay at this level or grow from this level this becomes a new revenue baseline. We don't see anything that really is going to drive S-GNA substantially higher.

Predominantly what you saw during the quarter reflects the new run rate, meaning given that we would expect that revenues would stay at this level of growth from this level. This becomes a new revenue baseline.

We don't see anything that really is going to drive SG&A substantially higher other than obviously.

Speaker 5: other than, you know, obviously, the typical normal increases that you would see from quarter to quarter as we continue to build out our infrastructure. Because remember, you know, we're catching up. Now we're a $186 million revenue company in a quarter. So, you know, you're dealing with now almost a $725, $750 million annual run rate of revenue. And we've always been in a position where we have to allow our infrastructure to sort of catch up.

Normal increases that you would see from quarter to quarter as we continue to build out our infrastructure because remember we're catching up now were $186 million revenue company in the quarter.

So you're dealing with now almost a $725 $750 million annual run rate of revenue and we've always been in a position where we have to allow a infrastructure to sort of catch up.

Speaker 5: But you know other than that there's there's nothing specific that we can look at there's no there's no big marketing program That's on the horizon or any fight that this had to be ordinary so you know we wouldn't participate that We probably be able to stay at these kinds of ratios. I would just caution that you know It's not something that continues to to go you know We're not going to get to a point where that's Q&A is going to be 10% of revenue You know, there's likely a point at which there's a step function of that

But other than that there's nothing specific that we can look at that Theres no theres no big marketing program, that's on the horizon or anything like that to Saturday ordinary so we would anticipate that.

We'd probably be able to stay at these kinds of ratios I would just caution that it's not something that continues to go we're not going to get to a point, where SG&A is going to be 10% of revenue.

A point at which there is a step function of SG&A.

Speaker 5: But otherwise, you should be able to see the same kind of leverage in coming quarters as what you saw in Q3.

But otherwise you should be able to see the same kind of leverage in coming quarters as what you saw in Q3.

Great and then.

Speaker 6: Great, and then one more, you guys mentioned that payments are being made on New York's HPD. Can you give us a sense of where cash or receivables sit on that, you know, now that we're through October , is it still lagged versus the normal contract, or you guys all caught up?

One more you guys mentioned that payments are being made on New York HPV can you give us a sense of where cash harvesting the malls sit on that now that we're through October still lagged versus the normal contracting that's all caught up.

Speaker 4: Yeah. Hi I feel like I'm keen you know Go ahead Norm

Yes.

It's Liam.

Go ahead norm.

Speaker 5: Yeah, sure. Yeah. I think we're still catching up a little bit. You know, I think there are a couple of things to look at when we talk about a lag though. They're looking at the invoices from the date of service.

Yes sure sorry.

I think we're still catching up a little bit.

And I think there are a couple of things to look at when we talk about a lag, though they're looking at the looking at the invoices from the date of service to.

Speaker 5: to where we are today, in which case I would say that's a little bit more of a lag than what we typically see. But the real factor there is when the contract gets registered. For all of these municipal contracts, and this is why, you know, we made such a big deal about the contract being registered. That's why we mentioned it in an 8k. No contract, even if it's fully signed, no contract is paid for until, or the services are not paid for until the contract is registered.

To where we are today in which case I would say, it's a little bit more of a lag in what we typically see but the real factor. There is when the contract gets registered for all of these municipal contracts and this is why we made such a big deal about the contract being registered Thats why we mentioned it in an 8-K no no contract even if it's fully signed.

New contract is paid for until where the services are not paid for until the contract is registered thankfully. This contract has been registered when I look at where we are in the payment cycle vis vis the registering in the contract and we're fully we're fully within the typical range of what we've seen across different municipal agencies in a bunch of different municipalities.

Speaker 5: thankfully this contract has been registered. When I look at where we are in the payment cycle vis-a-vis the registering of the contract, then we're fully within the typical range of what we've seen across different municipal agencies and a bunch of different municipalities. We've been in the municipal business for three and a half years now, so none of that is out of the ordinary. It's just that it's a very big

We've been in the municipal business for three and a half years now so none of that is that it is out of the ordinary it's just that it's a very big number.

Speaker 4: Thank you. Yeah. And there are only things to have there as Norma is saying. I think this is.

Thank you.

Yes.

The only thing to add there is as notwithstanding I think.

This is.

Speaker 4: Our experience has been this, where we go back and forth with the invoice and get the invoice in the right cadence, the way the municipalities like to see it, and then payments happen in a fairly regular fashion from there on. So pretty indicative of where we've been in previous contracts, same here, but as Norm says, it's a larger number.

Our experience has been this there we go back and forth with the invoice and get the invoice and the right and the right cadence of Levi.

Municipalities like to see it and then payments happen in a fairly regular fashion from there on so pretty.

Pretty indicative of where we've been in previous contracts same here, but as norm says, it's a larger number this time around.

Thank you. The next question we have comes from Richard close from Canaccord Genuity. Please go ahead.

Speaker 1: The next question we have comes from Richard Close from Tanacore Genuity. Please go ahead.

Speaker 2: Yeah, thanks for the question. Maybe just to follow up on that, Norm, can you just sort of, you know, walk us through your thoughts on accounts receivable and how we should think about that number in the fourth quarter? And I know you're not given 2024 guidance, but just, you know, sort of the trajectory of that number.

Yes.

Thanks. Thanks for the question, maybe just a follow up on that norm can you just sort of walk us through your thoughts on accounts receivable and how we should think about that number in the fourth quarter and I know youre, not giving 2020 for guidance, but just sort of the trajectory.

<unk> of that number.

Speaker 5: Yeah, sure, and let me take that period to give you insight into how we look at managing our AR portfolio from the top down. So if you look at the, if you look at the number itself, it's a very, very large number, right? We're over $200 million in AR.

Yes, sure Richard and let me take your opinion give you insight into how we look at.

Managing our portfolio from the top down so if you look at the <unk>.

If you look at the number itself is a very very large number right, we're over $200 million and a R.

Speaker 5: If you look at it from – there are two different ways of looking at it, obviously. So you can look at it in terms of base sales outstanding, now it's over $200 million of AR, but now we're at a point where we're doing close to $200 million, 186, almost $190 million in quarterly revenue. So in terms of just a raw calculation of base sales outstanding, while it's higher than it was at, let's say, the last quarter end at 630, it's actually lower than it was at March of 2020's rate.

If you look at it from two different ways of looking at it. Obviously so you can look at it in terms of days sales outstanding now it's over $200 million of they are but now we're at a point, where we're doing close to $200 million 986, almost $90 million in quarterly revenue. So in terms of just the raw calculation of days sales outstanding while it's higher than it was at let's say.

The last quarter and at 630.

Actually lower than it was at March.

At March 2023, so that's a little something to take into account.

Speaker 5: So that's a little something to take into account. It's still a number that's very large. And the thing that we look at is across the different buckets, the different aging buckets of our accounts receivable is whether or not we've seen any deterioration in our portfolio and thankfully we have not. We actually spent, you know, sort of behind the headlines, or underneath the headlines, we actually did very well in collecting some of our relatively age receivables during this quarter, both on the transportation side of mobile health.

It's still it's still a number that is.

Very large and the thing that we look at it across the different buckets the different aging buckets of our accounts receivable is whether or not we've seen any deterioration in our portfolio and thankfully we have not we actually spent.

Sort of behind the headlines are underneath the headlines we actually did very well in collecting some of our relatively aged receivables starting this quarter both on the transportation side of mobile health.

Speaker 5: The next thing that we like to look at is the makeup of the portfolio on those different buckets. So when I look at what it's current, right, which is typically defined as zero to thirty days.

The next thing that we like to look at is the makeup of the portfolio in those different buckets. So when I look at what is current right, which is typically defined as a zero to 30 days. So at March just to give you a little bit of a baseline or a <unk>.

Speaker 5: So, at March, just to give you a little bit of a baseline or, you know, a comparison, at the end of the first quarter, only about 25, 26 percent

Comparison at the end of the first quarter only about 25, 26% of our portfolio was under 30 days as of June 30th that number was about 56% and now because of the fact, obviously that.

Speaker 5: of our AR portfolio was under 30 days. As of June 30th, that number was about 56%. And now, because of the fact, obviously, that it's sort of the way the map works, because of the fact that so much of this revenue is stuff that happened during this quarter, as of September 30th, nearly two-thirds, about 63, 64% of our AR is current.

The way the math works because of the fact that so much of this revenue and stuff that happened during this quarter.

As of September 30th nearly two thirds about $63, 64% of our current.

Speaker 5: Also, when I look at the other side of the equation, when I look at the over 90, it's a lower number than what we've seen. When I look at over 180, you know, maybe 10%. And I will say, in this business, especially on the ambulance side, we still collect quite a bit of what's over 180 days old. We often will collect things even out to 360 and plus. So I guess my summary of the answer there is that the AR is very, very large.

Also when you look at the other side of the equation when I look at the over 90, it's a lower number than what we've seen when I look at over 180, maybe 10% and I will say in this business, especially on the ambulance side, we still collect quite a bit of what its over 180 days old we often will collecting being an outflow of $360 plus so.

I guess my my summary of the answer to the areas that are very very large we would expect it to start to come down because we would expect to get on a better.

Speaker 5: We would expect it to start to come down because we would expect to get on a better payment schedule, let's say, with some of our larger customers like HPD or other municipal. But at the same time, we're growing revenues by quite a bit. So that's going to that's going to continue to put pressure on the overall number. But the thing that we look at most closely is how the buckets break down and that's been pretty, pretty well managed.

Payment schedule, let's say with some of our larger customers like HDD or rather municipal but at the same time, we're growing revenues by quite a bit. So that's going to that's going to continue to put pressure on the overall number but the thing that we look at most closely is how the buckets break down and that's been pretty pretty well managed.

Speaker 2: Okay, thank you. And I guess on a follow up, if we can just sort of look at the gross, you know, gross profit margin, and just go into maybe a little bit more detail on your comments there and thought process of that number going forward.

Okay. Thank you and I guess on a follow up if we can just sort of look at the gross.

<unk>.

Gross profit margin.

And just go into maybe a little bit more detail on your comments, there and thought process of that number going forward.

So yes sure I mean as I mentioned in my in my prepared remarks.

Speaker 5: So, yeah, sure. I mean, as I mentioned in my prepared remarks, you know, over the last couple of quarters, we've talked quite a bit about how it was our expectation that margins would grow sequentially. As you went through the quarters, we had 28.1% growth margin in Q1. I think they went to 33, 4 or something on those lines. And last quarter, now we're taking a step back. But what we had always maintained was that that was assuming that the growth was happening at a pretty steady state. And what you saw this past quarter.

Over the last couple of quarters, we've talked quite a bit about how it was our expectation that margins would grow sequentially. As we went through the two quarters. We had 28, 1% gross margin in Q1, I think I went to 33 four something along those lines in the last quarter now, we're taking a step back but.

But what we have always maintained was that that was assuming that the growth was happening at a pretty steady state.

And what you saw this past quarter was.

Speaker 5: a good bit more revenue than I think what we had anticipated a few months ago when we talked about.

A good bit more revenue than I think what we had anticipated a few months ago, when we talked about.

Growing that revenue on a growing net gross margin on a sequential basis and when we look at it there's no one particular project that.

Speaker 5: There's no one particular project that is coming. We haven't replaced high margin revenue, with low margin revenue, there's none of that going on. It's really all in the areas of labor, which is both a subcontracted labor percentage being higher than it would typically be. Over time being higher than it would typically be. The good news there is that those metrics, those KPIs which lead to the margins, improved sequentially as we went through the quarter. So, excuse me, it was at a certain level in July . It put...

We don't we haven't replaced high margin revenue with low margin revenue, there's none of that going on it's really all in the areas of labor, which is both the subcontracted labor percentage being higher than it would typically be overtime being higher than it would typically typically be the good news there is that that those metrics those kpis, which lead to the margins improved sequentially as we went through.

Through the quarter so.

Speaker 5: Excuse me, it was, you know, at a certain level in July , it had proved in August and...

Excuse me was up at.

A certain level in July.

Improved in August and a pool began in September.

Speaker 5: So those are the things that are driving it, and any time you're going to add new project launches and therefore a lot of revenue in any one particular quarter, that's going to be the pressure that you have. Having said that,

Those are the things that are driving it.

And anytime youre going to add a new product with new project launches and therefore, a lot of revenue.

In any one particular quarter that that's going to be the pressure that you have.

Having said that.

Without pinning down what I think Q4 gross margins will be.

Speaker 5: pinning down what I think Q4 gross margins will be, I will say that directionally, margins are higher than what you see this quarter. What you see this quarter, on the one hand, when it comes to revenue, that becomes our new revenue baseline off of which we think we can build. This is not any really non-recurring revenue in the quarter. This is real recurring revenue. On the other hand, when you look at the gross margin number, I would say that that was something that was temporarily lower than it really ought to be. It's not our run rate of gross margin. It's not the run rate of gross margin that we saw leading out of the quarter. If I would simply take the September

I will say that directionally.

Margins are higher than what margins are higher than what you see this quarter, where do you see this quarter on the one hand when it comes to revenue that becomes under our new revenue baseline off of which we think we can bill.

And it really nonrecurring revenue in the quarter. This is real recurring revenues on the other hand, when you look at the gross margin number I would say that that was something that was.

Temporarily lower than they really ought to be it's not a run rate of gross margin. It is not the run rate of gross margin that we saw leading out of the quarter. So if I would typically take I mean, if I would simply take the.

The September month margin and apply that to Q4 that that in and of itself.

Speaker 5: month margin and apply that to Q4, that in and of itself would account for a higher gross margin. So that sort of plays into our expectation for the fourth quarter.

Account for a higher a higher gross margin so that that sort of plays into our expectation for the fourth quarter.

Thank you Sir.

Speaker 1: Thank you, so the next question we have comes from David Lawson from BT IG. Please go ahead.

The next question we have comes from David Larsen from <unk>. Please go ahead.

Hi, congratulations on the good quarter can you maybe talk a little bit about your relationship with <unk>.

Speaker 8: Hi, congratulations on the good quarter, we can you maybe talk a little bit about your relationship with

Speaker 8: city and the state of New York and that contract itself. Can you just sort of refresh us on what exactly it is you're doing for the migrants? How many of these migrants are families with children that you're serving? And then it's my understanding that the way the contract stands right now, it's about a one-year contract.

City and the state of New York and that contract itself can you just sort of refresh us on what exactly it is you're joining for the migraines. How many of these migrants are families with children that you're serving.

And then it's my understanding that the way the contract stands right now it's about a one year contract through mid 2024.

Speaker 8: through mid-2024, you know, what are the odds, in your view, of it potentially extending? And then just lastly, and I'm sorry for the long question, have you been able to meet with the comptroller of New York? And I think it's, he's had some concerns on the detail of the invoices. Have you been able to address his concerns? I'm in an airport. Sorry for the background noise. Thank you.

You know what are the odds in your view of potentially extending and then just lastly, and I'm sorry for the long question have you been able to meet with the Comptroller of New York and I think it's we've got some concerns on the detail of the invoices have you been able to address these concerns.

Airport, sorry for the background noise. Thank you.

No problem. Thanks, Thanks, David So I'll start with the first part of your question our relationship with the city. So we've been working with the city.

Speaker 4: No problem. Thanks, David. So I'll start with the first part of your question, our relationship with the city.

Speaker 4: So we've been working with the city, as was mentioned, for over three years. We've been working on various different population health programs. They actually also provide, as I mentioned, the medical transportation for all 11 public, New York City, health and hospitals.

As mentioned for over three years, we've been working on various different population health programs actually also provide as I mentioned the medical transportation for all 11 public New York City, helping hospitals locations.

Speaker 4: location. So we've been working with the city for a number of different years. You've heard us talk about the SHEL program, which is the Street Health Outreach and Wellness Program. You've heard us talk about our work with the Department of Homeless Services. You've heard us now talk about our work with

A location so we've been working with the city for a number of different years, you've heard US talk about the show program, which is the street health outreach and wellness program, you've heard us talk about our work with the department of homeless services, you've heard US now talk about our work with housing preservation and development and you've heard US talk about our work with New York City are helping hospitals. So we've been helping New York city across a wide range.

Speaker 4: housing preservation and development. You've heard us talk about our work with New York City.

Speaker 4: health and hospitals. So we've been helping New York City across a wide range of population health and medical transportation needs.

Population health and medical transportation needs, because we started working with the city over three years ago, and we've provided care to millions of new Yorkers together, we're very very proud of that.

Speaker 4: we started working with the city over three years ago, and we've provided care to millions of New Yorkers together. We're very, very proud of that.

Speaker 4: In terms of the asylum seeker and migrant care work, it actually all started with the first buses arriving at Port Authority and we actually provided the initial paramedic units at the Port Authority when the first buses started arriving.

In terms of the asylum seeker and migrant care work. It actually all started with the first buses arriving at Port Authority and we actually provided the initial paramedic units at the Port authority when the first buses started arriving from.

Speaker 4: from our southern border. That's really how our work together started. We provided the paramedic teams and we're doing health screenings, infectious disease screenings and so forth for the sound seekers as they're arriving.

From our southern border and Thats really how our work together started we provided the paramedic teams and we're doing health screenings infectious disease screening and so forth for the sound seekers as Theyre, arriving and it's essentially grown from there to all of the services that we've been talking about and really it's grown to what we call our.

Total care services and ranges from medical care that could be.

Speaker 4: infectious disease screenings, urgent care, and other medical care vaccinations as well. It encompasses behavioral health, which includes depression screening and other case management work, and intensive social work as well. And it encompasses, obviously, the other facets of the program in order to provide the total care that asylum seekers need when they're arriving, all with the goal to help them land safely and then ultimately acclimate and, what we say, graduate out of the program. So those are the services we've been providing. The different sites have a different composition of services, but those are the comprehensive suite of services.

It's actually a disease screening urgent care and other medical care vaccinations as well.

Accomplishes behavioral health, which includes depression screening and other case management work and intensive social work as well.

And then encompassed obviously the other facets of the program in order to provide the total care that asylum seekers need when they arrive in all with the goal to help them land safely and then ultimately act.

Speaker 4: acclimate and what we say graduate out of the program.

Acclimate and when we say graduate out of the program. So those are the services we've been providing.

Speaker 4: So those are the services we've been providing. The different sites have a different composition of services, but those are the comprehensive suite of services that we've been providing. You asked about what percentage are families arriving with children. It's actually a large majority of the asylum seekers in our care are families with children composition. Most of the sites are families with children, and so we're providing services from

Different sites have a different composition of services, but those are the comprehensive suite of services that we have been providing you asked about the what percentage are families arriving with children. It's actually a large majority of our.

The asylum seekers in our care are families with children composition. Most of the sites are families with children and so we're providing services from.

Speaker 4: from ages two and pediatric care and up all the way to as old as 80 years old we've been providing service.

From.

Ages two.

And pediatric care and up all the way to two as old as 80 years old even providing services.

Speaker 4: So, the large majority of our families are children. You asked also, David, about the length of the contract. As you alluded, the contract, the HPD contract, is for the asylum seeker work we're doing is a year long, which is actually fairly customary for our contracts with the city.

So the large majority of our families with children and you asked also David about the the length of the contract as you alluded the contract. The HPE contract is pretty sound secret work. We're doing is a year long was actually fairly customary for our contracts with the city.

Speaker 4: Many of them have been extended, many of them have been re-awarded. We do fully anticipate that portions will be put out for RFP and so forth, which is very, very customary to how we've been working with the city now for over three years, as I mentioned. That contract with HPD was signed and initiated in May.

Many of them have been.

Have been extended many of them have been re awarded we do fully anticipate the portions will be will be put out for RFP and so forth, which is theyre very customary to how we've been working with the city now for over three years as I mentioned, the cotton that contract with HPE was signed and initiated in May.

Speaker 4: So if you follow that year-long chronology, you would have it till May of next year. But again, really our goal is to provide the services of the city needs, the medical care and the behavioral health care of the city needs, for as long as the city may need it. And our goal is to help the city in aiding the asylum seekers so that they can essentially

And so if you follow that year long chronology, you would have it till may of next year, but again really our goal is to provide the services at the city needs for medical care and behavioral health care at the city needs.

As long as the city may need it and our goal is to help.

It helped the city in aiding the it sound secrets that day.

Can essentially.

Speaker 4: live their lives, acclimate out of the program, and receive the services that they need for however long, as the city asks us to provide them for however long the asylum seekers need

I live there.

Lives are coming out of the program and receive the services that they need for however, long is the city assets to provide a favorable on their phone seekers need it.

Speaker 1: Thank you, Sal. The next question we have comes from Mike Latimer from Northland Capital Markets. Please go ahead.

Thank you. So the next question we have comes from Mike Latimore from Northland Capital markets. Please go ahead.

Speaker 9: Great, thanks. Congrats on the phenomenal revenue EBITDA growth here. I guess just back on the cash position for a second, maybe just trying to see if we could bracket that a little more. I mean, do you think that cash flow from operations might be above or below EBITDA in the fourth quarter? And then by year end, what months do you think you'll get paid up to by year end?

Great. Thanks, Congrats on the phenomenal revenue EBITDA growth here.

I guess just back on the cash position for a second maybe just trying to see if you could bracket that a little more.

And do you think that cash flow from operations might be.

Above or below EBITDA.

In the fourth quarter, and then by year end what months do you think you'll get paid up to by year end, let's say.

Yeah.

Speaker 5: Yeah, so hey, Mike, this is Norm. I'll take that one. So, and just this allows me to make a point that unlike previous quarters, we filed our 10-Q.

Yes, So hey, Mike just normal I'll take that one so.

And just this allows me to make a point that unlike previous quarters, we filed our 10-Q.

Speaker 5: for the quarter already. We did that pretty much concurrently with the earnings release. So, well, a lot of information is in the release anyway, but that, you know, even more detailed information is currently available.

For the quarter already we do that pretty much concurrently with the earnings release so.

Well, there's a lot of information is in our release anyway.

More detailed information is currently available.

Speaker 5: So as far as the cancel operations as as as it compares the EBITDA so one thing that you'll notice is that the

So as far as the cash flow from operations.

As it compares to EBITDA. So one thing you'll notice is that the.

The impacts that you saw in operating cash flow were entirely from the working capital side otherwise in terms of what we like to call. The P&L operating cash flow that number was already pretty close to resembling the EBITA number I guess the question is when we're going to get to a point, where we're working capital is no longer a drag on the on the operating.

Speaker 5: flow, that number was already pretty close to resembling the EBITDA number. I guess the question is when we're going to get to a point where working capital is no longer a drag on the operating cash flow. So it might happen in Q4. Frankly, it's really going to depend on the timing of when we get specific payments in here compared to how quickly we grow and how our expense base grows because we're laying out the money in effect for labor for a lot of other things to our vendors in advance of when we get paid by the city. So we have that ongoing negative cash cycle.

Cash flow so.

It might happen in Q4, frankly, it's really going to depend on the timing of when we get specific payments in here compared to how quickly we grow.

And how are our expense base grows because we're laying out the money in effect for labor for a lot of other things to our vendors in in advance of when we get paid by the city. So we have that ongoing negative cash cycle as far as as far as those programs go whether it's a city or whether it's some of our larger municipal or other customers.

Speaker 5: for labor for a lot of other things to our vendors in advance of when we get paid by the city. So we have that, you know, ongoing negative cash cycle as far as those programs go, whether it's the city or whether it's some of our larger, municipal or other customers. So I would expect that, you know, we're sitting here early November , we've got about.

So I would expect that.

We're sitting here early November we've got about.

Speaker 5: you know, is it six, six, six, seven weeks in the end of the year? You know, it's our expectation that we would be pretty, pretty well caught up by the end of the year. Please, that's our hope.

Is it six six weeks seven weeks at the end of the year, it's our expectation that we will be pretty pretty well caught up by the end of the year at least that's our hope.

Speaker 5: It's just something that is somewhat unpredictable given that we're not the ones who actually pay ourselves. And we are in discussion with the different finance departments, the different relevant finance departments on a daily basis, at a bunch of different levels, whether it's me, whether it's Lee, whether it's people within our clients or operating teams. So there's a lot of dialogue in going on. I should point out and sort of ties a little bit to something that I think David mentioned in the question just four years.

It's just something that that is somewhat unpredictable given that we're not the ones, who actually pay ourselves and we.

We are in discussion with different <unk>.

Finance departments, the different relevant finance departments on a daily on a more daily basis had a bunch of different levels, whether it's me, whether it's Lee whether it's people within within our finance our operating teams. So there's a lot of dialogues going on.

I should point out in that sort of ties a little bit to something that I think David mentioned in the question just for years, which is any of the slowdown in the payment.

Speaker 5: Any of the slowdown in the payment is not, none of the slowdown in the payment is related in any way, shape, or form.

He is not none of the slowdown in payment is related in any way shape or form.

Speaker 5: two disputes. Nothing is being disputed in terms of the amounts of recharging in terms of the categories for which we're charging. It's simply a matter from time to time to ask you for more backup.

Two disputes nothing is being disputed in terms of the amounts that were charging in terms of the categories for which we're charging it's simply a matter of from time to time of asking for more backup.

Speaker 5: which we have and we just have to send over their way. I think once we get on a pretty good cadence with them and in a good attainment rhythm with them we will catch up pretty quickly. The schedule that we I'm not going to share the specific details but we have shared a schedule with the city that lays out when we would expect to get paid and if they do keep to that schedule on a month by month basis on a monthly invoice by monthly invoice basis we would be largely quite up by the end of the year with your typical 60 day, you know, 60 to 90 day lag from when the services are provided which is normal for all of our contracts. So that would obviously have a big impact on what we see in Q4. I'm just a little bit low to make an estimate as to where the balance she is going to be come year in because there are just a lot of things I could move in that direction and what I would look for is just sort of an improvement, a reduction in the base as it fails outstanding and other metrics that we're indicating on the operating cash low side.

Which we have which we just have to send over their way.

I think once we get a pretty good cadence with them.

Good payment rhythm with them, we will you will catch up pretty quickly the.

Schedule that we I'm not going to share the specific details, but we have shared the schedule with the city that lays out when we would expect to get paid and if they do keep it to that schedule on a month by month basis on a monthly invoice by invoice basis, we would be largely caught up by by the end of the year with your typical I'll say 60 day 60 to 90 days.

A lag from.

When the services are provided which is normal for all of our contracts. So that would obviously have a big impact on what we see in Q4, I'm, just a little bit low to make an estimate as to where the balance sheet is going to be come year end because they are just a lot of things that could move in that direction and what I would look for is just sort of an improvement a reduction in the day sales on sales outstanding.

And other metrics that would indicate on the operating cash flow side.

Speaker 10: that we're starting to catch.

Trying to catch up.

Speaker 9: Okay, great, thanks. And then in the second quarter, I know you signed up a select group of staffing agencies to, you know, contracts that were meant to, you know, maybe give them some more volume, but also under favorable terms. Can you tell, and I know this quarter you've ramped up really quickly on this new deal, but can you tell us those

Okay, great. Thanks, and then.

In the second quarter I know you signed up.

A select group of staffing agencies too.

Contracts that were meant to.

Maybe give them some more volume, but also under favorable terms.

Can you tell.

And then I know this quarter you ramped up really quickly on this new deal but.

Can you tell us those.

Speaker 9: you know contracts and the staff agency relationships and the terms are they all being kind of met as expected you know I guess needs that's kind of rapid growing soon.

Contracts in the staffing agency relationships and the terms are they all being kind of met as expected I guess factoring in this kind of rapid erosion.

Yes.

Yes.

Speaker 4: Yeah, so Mike, absolutely. So we're actually utilizing all of those contracts and full effect in Q2, Q3, and beyond all those partners, we call them partners.

Yes, so Mike absolutely. So we're actually utilizing all of those contracts in full effect in Q2, Q3 and beyond all of those all of those partners, we call them partners because.

Speaker 4: they're helping us scale tremendously. All of those partners, all of those contracts are performing as expected. All of the negotiations and structuring all those contracts are actually well done. And so yes, we're absolutely benefiting greatly from those in Q2 and Q3 and going through the rest of the year here.

Helping us scale tremendously all of those partners all of those contracts are performing as expected.

All of the negotiations and structuring of those contracts are actually well done and so yes, we're absolutely benefiting greatly from those in Q2, and Q3 and going through the rest of the year here.

Okay.

Speaker 1: Thank you. The next question we have comes from David Groeson from Spifle. Please go ahead.

Thank you.

Next question, we have comes from David Grossman from Stifel. Please go ahead.

Okay.

Speaker 11: Thank you, good afternoon. I'm wondering, Lee, you spoke a little bit about your commercial business and your prepared remarks.

Thank you good afternoon.

I'm wondering you spoke a little bit about your commercial business in your prepared remarks.

Speaker 11: It sounds like you're still at 73,000 lives with four pairs, with roughly 60,000 lives assigned as a, I guess, now. Can you give us any better insight into how these pilots should ramp from a revenue perspective over the next 12 months and any new business that may be in the pipeline to give us a sense of just how this business should scale over the next year or so.

It sounds like.

Youre still at 73000 lives with four pairs with roughly 68000 lives assign to it so I guess now can.

Can you give us any better insight.

And how these pilots should ramp from a revenue perspective over the next 12 months.

Any new business that may be in the pipeline to give us a sense of just how this business should scale over the next year or so.

Yes, that's absolutely David happy to do so so I think we look at that business. We look at a multitude of different metrics. The first is as you mentioned the number of patients that are being assigned to us that number I would like to see that number growing it is growing it's growing very much so and so I would like to see continued growth there from there.

Speaker 4: Yeah, that's absolutely David, happy to do so. So I think we look at that business, we look at a multitude of different metrics. The first is as you mentioned, the number of patients that are being assigned to us, that number, I'd like to see that number growing. It is growing, it's growing very much so, and so we'd like to continue to grow there. From there,

I track and our team tracks sort of convergence how many of those patients do we engaged to engaged we go and provide the care gap go into the home and I'd like to see that number is going to also increase over time as our teams get more and more specialized more and more trained as we get more and more experience.

Speaker 4: And our team tracks, you know, sort of conversions. How many of those patients do we engage, do we engage, do we go and provide the care gap going to the home? And I'd like to see that number is going to also increase over time as our teams get more and more specialized, more and more trained, as we get more and more experience.

Speaker 4: And as we bring on one more talent to our team, that number has also been going up. In fact, last week I was looking at a metric where I saw the highest conversion since we started.

And as we bring on more and more talent. Our team that number has also been going up in fact last week I was looking at a metric right. So at the highest conversion since we started so that metric I'd like to see going up and it is going up and I'm pleased with our progress there in terms of how many of the patients that are signed to us engage with us and obviously, we have a unique model where we don't.

Speaker 4: So that metric I'd like to see going up and it is going up and I'm pleased with our progress there in terms of how many of the patients that are trying to us engage with us. And obviously we have a unique model where we're

Speaker 4: follow the patients to come into our office, but rather we go to their home. And obviously we are able to...

Paul the patients should come into our office, but rather we go to their home and obviously, we are able to decrease the barriers of access and bring care to the patients that need it almost all of these patients have not seen their primary care provider in over a year and many of them are chronically ill almost all of them are chronically ill.

Speaker 4: decrease the barriers of access and bring care to the patients they need it. Almost all of these patients have not seen their primary care provider in over a year. And many of them are chronically ill. Almost all of them.

Speaker 4: or are in need of care gaps, our need of intervention, our need of our service.

Or are in need of care gaps are need intervention or need of our services.

Speaker 4: So I look at assigned patients, I look at conversion, I look at conversions. The other thing I look at, which I'm very pleased with that I mentioned on the call, is the number of care gaps, the breadth of services that we're offering. And we feel like this is a very big, an additional competitive advantage for us. Obviously the mobile deliveries of competitive advantage and our broad,

I look at assigned patients I like the conversion I look at conversions. The other thing I look at which I'm very pleased with what I mentioned on the call is the number of care gaps the breadth of services that we're offering and we feel like this is a very big.

An additional competitive advantage for us obviously, the mobile deliveries are a competitive advantage and our broad set of care gaps is also a competitive advantage, we get a lot of market feedback that what we're offering the breadth of our services is actually pretty unique as well and so I would like to see us offer more and more and more care gaps more and more clinical services to more and more.

Speaker 4: set of care gaps is also a competitive advantage. We get a lot of market feedback that what we're offering, the breadth of our services is actually pretty unique as well.

Speaker 4: And so I'd like to see us offer more and more and more care gaps, more and more clinical services to more and more chronically ill patients who need it. And as we see that, we see our health plan partners relying on us and partnering with us more and more and assigning us more patients and as we scale that.

Chronically ill patients who need it and as we see that we see our health plan partners relying on us and partnering with us more and more and more Chinese us more patients and as we scale that so those are the metrics at a high level that we look like we look at we look at a lot more in depth, but I'm looking forward to sharing on these calls our progress on <unk>.

Speaker 4: So those are the metrics at a high level that we look at. We look at a lot more in depth, but I'm looking forward to sharing on these calls our progress.

Speaker 4: on how many patients are continued growth of the number of patients that were being assigned but also how many were engaging, how many were enrolling in our remote patient monitoring and virtual care platform, how many were doing cardiac monitoring for, how many care gaps were closing and ultimately the contracts we have can evolve into us.

How many patients are continued growth of the number of patients that were being assigned but also how many were engaging how many were enrolling in our remote patient monitoring and virtual care platform. How many we're doing cardiac monitoring for how many care gaps were closing and ultimately the contracts we have.

Can evolve into us, becoming the primary care provider of record to us potentially sharing in the cost savings and the value based arrangements and value based care. So a lot of runway for us in this in this segment. We're very excited about it and we're also doing a lot of tremendous good for.

Speaker 4: becoming the primary care provider of record, to us potentially sharing in the cost savings and the value-based arrangements and value-based care. So a lot of runway for us in this.

Speaker 4: and this segment, we're very excited about it, and we're also doing a lot of tremendous good for the patients that we go and see that.

The patients that we go and see that.

Speaker 4: are closing significant care gaps and likely catching sort of catastrophic, potentially, ? welche visited seapater

We're closing significant care gaps and likely catching.

Sort of catastrophic potentially catastrophic episodes before before they become so like our diabetic retinal exams are catching flying that potential blindness or potential vision impairment before it happens as an example, so and that obviously becomes costly and is a horrible outcome for our patients. So we're very very pleased.

Speaker 4: episodes before they become so, like our diabetic retinal exams or catching potential blindness or potential vision impairment before it happens, as an example.

Speaker 4: So, and that obviously becomes costly and is a horrible outcome for a patient. So, we're very, very pleased with the momentum, with the metrics. We're pleased with the great care we're providing, with the good we're doing for the patients.

With the momentum with the metrics. We are pleased with the great care, we're providing with the good we're doing for the patients and so we think theres a lot of runway and a lot of growth in a lot of good.

Speaker 4: so we think there's a lot of runway and a lot of growth and a lot of good to be done in the coming quarters. And I'm looking forward to sharing that progress as we expand.

To be done and in the coming quarters, and I'm looking forward to sharing that progress as we expand.

Speaker 11: Right, so perhaps it's too early, but is there anything you can do to dimension, kind of what's going on, whether it be pipeline in terms of lives or any other quantitative metrics that may give us a better sense of how this business is scaling?

Alright, so perhaps it's too early but is there anything you can do the dimension.

What's going on whether it be pipeline in terms of lives or any other quantitative metrics that maybe give us a better sense of how this business is scaling.

Speaker 4: Yeah, we'll share out how many, as the number of lives and number of assigned patients get assigned to us, we'll share out. The partners we have collectively have millions of lives.

Yeah, we'll share out how many as well as the number of lives or number of assigned patients get assigned to US we'll share out the partners. We have collectively have millions of lives.

Speaker 4: to be assigned to close care gaps. And we're, in my opinion, only scratching the surface of what could be done. We need to scale the effort. We need to scale our patient engagement team. We have to continue to scale our team in the field. We continue already to invest significantly in our technology platform and our clinicians. So we can continue to invest there. And I can tell you that the partners we have have.

To be assigned to close care gaps and where in my opinion only scratching the surface of what could be done we need to scale. The effort, we need to scale scale, our patient engagement team, we have to continue to scale our team in the field.

Continue already to invest significantly in our technology platform.

And our clinicians so we can continue to invest there and I can tell you that the partners we have have.

Speaker 4: many hundreds of thousands of patients each, a million plus patients, as we consider the larger partners we have. So we are sort of scratching the surface of the good we could be doing there. And I think it's too early to say exactly the various metrics throughout that funnel I just described, but we definitely will be sharing that in the coming quarter.

Many hundreds of thousands of patients each a million plus patients.

As we consider the larger partners. We have so we are sort of scratching the surface of the good we could be doing there and I think it's too early to say exactly.

The various metrics stuff that funnel I, just described but we definitely will be sharing that in the coming quarters.

Speaker 1: Thank you. The next question we have comes from Ryan McDonald from Needham & Co. Please go ahead.

Thank you. The next question we have comes from Ryan Macdonald from Needham <unk> Co. Please go ahead.

Alright, Thanks for taking my questions and congrats on a nice quarter I appreciate the commentary on sort of the outline of the strategic vision hearing sort of the three key areas you're focused within in terms of insurance partners municipalities and health systems.

Speaker 9: Thanks for taking my questions and congrats on a nice quarter. Leah, I appreciated the commentary and sort of the outline of the strategic vision here and sort of the three key areas you're focused within in terms of insurance partners, municipalities and health systems. As you look at sort of time allocation and where you see the biggest opportunity, how would you rank those three opportunities in terms of potential pipeline or backlog generation moving forward? Thank you. Thank you.

As you look at sort of time allocation and where you see the biggest opportunity how would you rank those three opportunities in terms of potential pipeline or backlog generation moving forward.

Yes, so thanks, Brian for the question.

Speaker 4: Not sure I'll rank the customer segments because we love them all the same, so to speak, and we love all of our partners. And I would say, you know, when I look at it, obviously we shared the vast majority of the revenues coming from the health systems and municipalities today, but we see tremendous – our growth percentages are very, very large with the third pillar, which is the value.

Not sure I'll rank the customer segments, because we love them all the same so to speak and we love all of our partners and I would say when.

When I look at it obviously, we shared that the vast majority of the revenues coming from the health systems and municipalities today.

But we see tremendous our growth percentages are very very large with the third pillar, which which is the value.

Speaker 4: value-based care, insurer group. So we see, I'm not sure I'd stack rank one over the other because again, our goal is to provide an absolute exceptional customer experience as part of our culture for every single customer we have. No matter how large, no matter how small, we give an absolute exceptional customer experience, which is the reason why they tend to grow with us. And a small customer today can be a very large customer.

Al you based care insurer insurer group so.

We see I'm not sure I would stack rank one over the other because again our goal is to provide an absolute exceptional customer experience as part of our culture for every single customer we have.

No matter, how large no matter, how small we give an absolute exceptional customer experiences is the reason why they tend to grow well with us in the small customer today. It can be a very large study.

Sure so.

Speaker 4: So that's the way we view it. I will say that we continue to submit proposals for all three. We have growth plans in place for all three. We are investing in growth in all three. And so I think you're seeing a lot of the large contract wins to more address your question. We are seeing the large contract wins, the dollar value contract wins coming in the health systems for hospital partners. I mean, that's it.

So that's the way the way we view it I will say that we continue to submit proposals for all three.

We have growth plans in place for all three we are investing in growth in all three and so I think youre seeing a lot of the large contract wins to more address your question. We are seeing the large contract wins the dollar value contract wins coming in the health systems, Our hospital partners and municipalities.

Speaker 4: The contracts that we are winning and negotiating and have in the pipeline with the insurers have the potential to be very large as we scale them and as we can take on more and more patients, then we'll be able to – they'll come with more associated revenue numbers and growth.

The contracts that we are winning and negotiating and have in the pipeline with the insurers have the potential to be very large as we scale them and as we can take on more and more patients.

Then we'll be able to do that they'll come with more associated revenue numbers and growth for them. So we're going to be investing in that but the wins right now are coming in in the dollar wins are coming in the first two I would say the expansion opportunities and the market potential is also coming in that in that third pillar with the insurance providers as well.

Speaker 4: So we're going to be investing in that, but the wins right now are coming in the dollar wins are coming in the first two. I would say the expansion opportunities and the market potential.

Speaker 4: is also coming in that third pillar with the insurance provider.

Speaker 9: Super helpful, I appreciate the color on that. And then maybe as a follow-up, earlier this year at the Investor Day, you had kind of outlined a path for 20% adjusted EBITDA margins exiting 25, that was underpinned really by a 40% gross margin profile. Given the success you continue to have on the top line and some of the temporary margin pressure that creates, do you still view those 40% gross margin, 20% EBITDA margin targets as structurally achievable in the business today?

Super helpful. I appreciate the color on that and then maybe as a follow up earlier this year at the Investor Day, you had kind of outlined the path to a 20% adjusted EBITDA margins exiting 'twenty five that was underpinned by a 40% gross margin profile.

Given the success you continue to continue to have on the top line and some of the temporary margin pressure that creates do you still view those 40% gross margins and 20% EBITDA margin targets as structurally achievable in the business today.

Yes.

Speaker 4: They are structurally achievable. Oh, go ahead. Well, let me just say, Norm, that they are structurally achievable and they continue to be our goals as we stated the semester day. But Norm, go ahead.

They are they are structurally achievable Oh go ahead, let me just say nor that they are structurally achievable and they continue to be our goals.

As we stated at the Investor day, but norm go ahead.

Speaker 5: Yeah, pretty much how I was gonna say it. Yeah, the way we sort of model that out is, is we'd have roughly 40%.

Yes, that's pretty much how I was going to say.

The way, we sort of model that out as we'd have roughly 40%.

Speaker 5: roughly 40 percent gross margins on a blended basis, consolidated basis, and SG&A would be about another 20 points. We're kind of there on the SG&A with the understanding that, you know, we're going to take a — we might take a step back before we take a step forward, but we're pretty close. Where, obviously, we have more room to

Roughly 40% gross margins on a blended basis consolidated basis, and SG&A would be about another 20 points, we're kind of there on the SG&A.

With the understanding that we're going to take us we might take a step back towards a step forward, but we're pretty close where obviously we have more room to two.

Speaker 5: to get through is on the, is on the growth margin side, but yeah, we think structurally it is achievable. And I'll just echo what Lee said. It's definitely our goal.

To get to is on the is on the gross margin side, but yes, we think structurally it is achievable.

And I'll just echo what Lee said, it's definitely our goal, it's really going to be a matter of digesting. Some of these recent revenue gains and and then taking that number higher.

Speaker 5: It's really going to be a matter of digesting some of these recent revenue gains.

Speaker 5: and uh and then taking that number higher like we kind of know where we do it.

No where we do it.

Speaker 5: We kind of know where we do it and how we do it, it's just going to be a matter of the timing of that growth curve on the top line that's going to have an impact in the near term on how close we get to that number.

Kind of where you do it and how we do it.

Just going to be a matter of the timing of that of that growth curve on the top line, that's going to have an impact in the near term on how close we get to that number.

Speaker 1: Thank you. So the next question we have comes from Peter Chickery from Deutsche Bank. Please go ahead.

Thank you so.

The next question we have comes from Peter Chickering from Deutsche Bank. Please go ahead.

Speaker 12: Good afternoon guys. So this model has evolved a few times in the last few years, starting off with COVID and more for you to homelessness and then into migrants. I guess, how should we think about with homeless and migrants as a growth engine for the next few years? Can you talk about who we're seeing as competition in those markets now? For example, for the board opportunity, what's the company won that contract?

Hey, good afternoon, guys. So this model has evolved a few times in last few years starting off.

Morphing into homelessness, and then into the migrants I guess like how should we think about what's homeless of migrants as a growth engine.

The next few years can you talk about as we were seeing as competition in those markets now.

For example for the board opportunity, what's the company won that contract.

Yes.

Speaker 4: Yeah, I Peter, I'll jump in. So it's still too early in terms of the Border Patrol contract. We'll find out in the coming weeks and months.

Yeah, Peter I'll jump in so it's still too early.

In terms of the border patrol contract, what we'll find out in the coming weeks and months, who ended up winning that but I. Just wanted to really mentioned start up by saying in terms of that evolution that you described.

Speaker 4: who ended up winning that. But I just want to really mention, start off by saying.

Speaker 4: in terms of that evolution that you described.

We.

Speaker 4: Our whole business, all of our segments, all of our customer base, our markets, we're growing at the target rate we put out, even without the HPD Asylum Seeker contract. So that obviously has...

Our whole business all of our segments all of our customer base our market.

We're growing at the target rate, we put out even without the HPV asylum seeker contract. So that obviously has.

Speaker 4: accelerated our growth, but we would still be growing at our target rate without that APD context. I want to make sure that I shared that. And so I think in terms of the asylum-seeker care, there's a lot of...

Celebrated our growth, but we would still be growing at our target rate without that ACD contact I want to make sure that I that I shared that.

And so I.

I think in terms of the asylum seeker here Theres a lot of.

There's a lot of transferable expertise that we've been bringing to that to that contract. So first off there is a transportation component to that and obviously one of the largest medical transportation providers in the country, we utilize that as I mentioned the first paramedic.

Speaker 4: transferable expertise that we've been bringing to that contract. So first off, there's a transportation component to that, and obviously one of the largest medical transportation providers.

Speaker 4: country. We utilize that, as I mentioned, those first paramedics.

Speaker 4: BLS units at the Port Authority were our transport teams.

<unk> unit at the Port Authority, where our transport teams.

Speaker 4: And we continue to use our platform to help the city scale.

And we continue to use our platform to help the city scale. The care for this particular population we use the same logistics platform uses the same tech platform. We use the same vaccine management platform and we're growing every single day, our capabilities that we're helping to provide the carefully asylum seekers.

Speaker 4: care for this particular population. We use the same logistics platform, we use the same tech platform, we use the same vaccine management platform, and we're growing every single day our capabilities that we're helping to provide the care for the asylum seekers, but we're also using that same exact.

Using that same exact.

Speaker 4: Those same exact competencies for our other contracts, as an example, you can imagine casework and behavioral health care that we're providing at scale for asylum seekers is also applicable to patients of insurance providers and some of our other key customers.

The same is that competencies for other contracts as an example, you can imagine casework and behavioral health care that we're providing at scale for asylum seekers is also applicable to patients of insurance providers and some of our other key customers. So we continue to leverage the capabilities, we have across all of our all of our segments. There is a common.

Speaker 4: So, we continue to leverage the capabilities we have across all of our segments. There's a common thread for all of the customers we partner with, for all of the patients we're providing care. We leverage all the same platforms, all the same technology. And so...

And thread for all of the customers we partner with for all of the patients we're providing care we leverage all the same platforms all of the same technology and so.

Speaker 4: That has allowed us to scale very, very rapidly. It's those investments in our people and our technology that have allowed us to do that. And we apply that to a myriad of different patient populations.

And that has allowed us to scale very very rapidly.

Investments in our people and our technology that that have allowed us to do that and we apply that to a myriad of different patient populations.

Speaker 4: And so I just want to make sure that I share that and I think that's a very key aspect of our growth and how we've been able to provide care for such a wide swath of patient

And so I just want to make sure that I.

Sure that and I think thats, a very key aspect of our growth and how we've been able to provide care for such a wide swath of patient needs.

Speaker 12: Okay, and then one more on the cash collections. I understand you're not guiding too.

Okay, and then one more on the cash collections I understand youre not guiding to.

Speaker 12: for recovery by the fourth quarter, but if you do sort of collect the cash in the fourth quarter, is it fair to think that you'll pay down the revolver?

Full recovery by the fourth quarter, but if you do sort of recover the cash or even reduce required the cash in the fourth quarter is it fair to think that youll pay they will pay down the revolver that you drew on and then looking actually at those delays how much of that is due to the sort of real time audit being conducted.

Speaker 12: that you drew on. And then looking actually at those delays, how much of that is due to the sort of real-time audit that's being conducted? You're very clear saying there weren't any disputes here, but when you're getting real-time audited, are you seeing any pushback from the state during that audit?

Youre very clear, saying any of this.

Here.

But when you are getting <unk> <unk> are you seeing any pushback from the state during that audit.

Speaker 12: I was just thinking about, you know, the hotel rates for eating food or accessing health care via telehealth or in-person. Thanks so much.

Thinking about.

The hotel rates pretty enthused or actually health care.

Tell us how the workforce. Thanks, so much.

So.

Speaker 5: So, you know, as far as your, your, the first quarter, your point.

Far as your first quarter your point.

Speaker 5: You know, I don't want to paint this into a corner, I mean, it would make a lot of sense for us, as we generate more working capital, more free cash flow, for us to use that to pay down the credit line. I mean, the credit line is not being seen as...

You don't know what paid us into a corner I mean, you would make a lot of sense for us as we as we generated.

We generate more working capital is more free cash flow for us to use that to pay down the credit line I mean, the credit line is not being seen as such.

Speaker 5: Something that we want to have on a permanent basis and something that we have there to give us some flexibility. So, yeah, clearly, we would, we would pay that down as we could as far as the other thing in terms of the impact of the real time audit. So, here's where I think the impact comes in. I think it's a matter of the type of backup.

Something that we want to have on a permanent basis, its something that we have there to give us some flexibility so.

Yes, clearly we would we would pay that down as we could as far as the other thing in terms of the impact of the real time water. So.

Here's where I think the impact comes in I think it's a matter of the type of backup that has asked for on these invoices and it's something that is being done in anticipation of the real time water there hasnt been.

Speaker 5: that is asked for on these invoices, and it's something that is being done in anticipation of the real-time audit. There hasn't been any other indirect impact of it, and that's kind of an impact that tends to wane after time, because once we get to a good rhythm with them in terms of the types of backup that we're going to provide,

There hasn't been any other indirect impact of it and that's kind of an impact that tends to wane. After time, because once we once we get to a good rhythm with them in terms of the types of backup there we're going to provide.

Speaker 5: together with our invoices, then we just do it again and again as we go through the next month's invoice and the next month's invoice. So it hasn't really had a big impact in terms of anything like that. It doesn't mean that they sit on every invoice for longer. It really just means that they will have some more requests for backup sort of up front than what we otherwise would have expected to provide. But that in and of itself is not really an issue for us.

Together with our invoices then we would just do it again and again.

As we go through the next months invoice and excellence in voice.

It hasn't really had a big impact in terms of anything like that it doesn't it doesn't mean, though that may sit on every invoice for longer it really just means that they will have some more requests for backup sort of upfront than what we otherwise would've expected to provide.

But that in and of itself is not really an issue for us.

Speaker 1: Thank you, sir. The last question we have comes from Richard of Campord Genuity. Please go ahead.

Thank you. So the last question we have comes from Richard close of Canaccord Genuity. Please go ahead.

Speaker 2: Yeah, thanks for the follow up. Just with respect to the backlog increase. And we I appreciate your comments on the three channels, but it is

Yeah, Thanks for the follow up.

Just with respect to the backlog increase.

And we I appreciate your comments.

The three channels, but.

Speaker 2: Most of that increase in the backlog number that you provided, I guess the $105 billion increase, is that pretty much evenly split between municipalities and the government channel?

Is most of that increase in the backlog number that you provided I guess the $105 million increase is that pretty much evenly split between municipalities in the government channel and then the health systems or how should we think about that split.

Speaker 2: than the health systems or how should we think about that split?

Speaker 5: So Richard, I'll take that one. I've got the backlog file open in front of me here. So the backlog, and again, just to refresh everybody's memory in terms of the way it works. So all things being equal, the backlog number would go down as more of the backlog turns into actual revenue, and quite a bit of it turned into actual revenue during this quarter. However, we're able to add quite a bit to the backlog based on different contracts that we've won, really across.

So Richard I'll take that one.

I've got this backlog fell open in front of me here so.

The backlog and again just to refresh everybody's memory in terms of the way it works so.

All things being equal the backlog number would go down as more of the backlog turns to actual revenue and quite a bit of it turn into actual revenue. During this quarter. However, we're able to add quite a bit to the backlog based on different contracts that we've won really across our geographies and across our business lines. So I would say, especially this quarter it's really.

Speaker 5: our geographies, and across our business lines. So I would say, especially this quarter, it's a really big mix. So you've got, you know, some of the government work that obviously is now on the table in terms of expansion or additional sites. That's clearly a big part of this. But at the same time, there are a couple of contracts we've won in the UK that I think that we mentioned, where those are very large contracts that are the kinds that will help us out. We have a couple with

Big mix, so you've got some of the government work that obviously is now on the table in terms of expansion or additional sites that that's clearly a big part of it.

But at the same time there are a couple of contracts we won in the U K, but I think that we mentioned.

Where those are very large contracts that are the kinds of tools that will help us out we have a coupled with.

Speaker 5: you know, Native American populations, you know, other types of projects that we do through one of our other entities. So, I mean, this is stuff that applies to both the U.S.

Native American populations are there other types of projects that we do through one of our other entities.

So this is stuff that applies to both the U S. It applies to the U K market. It applies to mobile health implies transport, it's actually really very very nicely spread out but without question without question a big part of it is.

Speaker 5: It applies to the UK market. It applies to mobile health. It applies to transport. It's actually really very, very nicely spread out. But without question.

Speaker 5: Without question, the big part of it is the fact that we do expect to realize more revenue on some of the asylum projects given that, given that we've seen it come in the way we saw it come in. But that's not by any measure, that's not an overwhelming drive at the backlog, rather the backlog is very diverse.

Is the fact that we do expect them to realize more revenue on some of the asylum projects given that.

Given that we've seen it come in the way we saw it come in but that's not that's not by a wide.

By any measure, but that's not a.

And overwhelming driving the backlog rather the backlog is very diverse.

Speaker 1: Thank you, sir. There are no further questions at this time. I would now like to turn the floor back over to lead me in some closing comments. Please go ahead.

Thank you Tom.

There are no further questions at this time.

I'd now like to turn the floor back over to the branch closing comments. Please go ahead.

Speaker 4: Thank you. Thank you all for joining us today. Thank you all very much. Much appreciated.

Thank you. Thank you all for joining us today.

Thank you all very much much appreciate it soon.

Speaker 13: Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Thank you ladies and gentlemen that does conclude today's conference. Thank you for joining US you may now disconnect your lines.

Well done but like ourselves.

[laughter], Okay, good really good.

Hi, guys I guess, we got on the call.

Okay.

Speaker 14: Thank you.

Sure.

Right.

Okay.

Yeah.

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Yes.

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